How to Shop for Health Insurance

May 27, 2019

If you don’t have much experience shopping for health insurance, you might be confused about where to start. Companies from private marketplaces claim to provide a better experience than government-owned exchanges. But what are the differences between these options and how do you know what’s right for you?

Just as consumers diligently scan specs to pick the right product for their needs, why not educate yourself to get the best value when searching for health insurance? Here’s what you need to know about the different providers out there.

Government-run health insurance exchanges

Government-run health insurance exchanges refer to the marketplaces developed by the Affordable Care Act (the ACA), also known as Obamacare. The health exchange run by the federal government, Healthcare.gov, allows you to compare policies, see the plans available in your state and apply for enrollment. State-level exchanges have their own marketplaces and can apply additional rules to insurance policies, obligating them to cover other services, for example. Both individuals and families can buy health insurance through these exchanges.

All health insurance plans on Healthcare.gov should offer 10 essential health benefits. Based on your state, plans may also cover a few more services in order to be listed on the exchange. State-based health insurance exchanges may also apply varying eligibility events for Special Enrollment Periods. Those 65 years of age or older qualify for Medicare, while low-income earners get the option to enroll in Medicaid through the public exchange in their state. Government-run exchanges are also the only places you can get cost-sharing and premium subsidies, which serve to cut out-of-pocket expenses and premiums for millions of qualified applicants.

Private health insurance exchanges

Like the federal and state health insurance exchanges, private alternatives offer self-service marketplaces that individuals and families can use to shop for health plans and additional benefits. They can still show you the plans available on your state or federal exchange. If you’re eligible for a subsidy, you can still apply for it even if you buy health insurance through a private marketplace. There are also private health plan exchanges created to offer additional support during the buying process and provide recommendations that are tailored to your interests.

Additionally, private exchanges often display “off-exchange” health plans that are not linked to any federal or state exchange. You can buy health insurance through an off-exchange company directly, or you can compare and shop plans through a broker. However, all off-exchange plans still adhere to the same requirements as on-exchange plans, such as the need to provide 10 essential health benefits. The only difference between on-exchange and off-exchange plans is that the latter may reimburse you for the cost of services once you receive them or may have a rule that compels you to visit a participating vendor, who bills them directly.

How to enroll in a health insurance plan

Enrolling in a government-run or private health insurance exchange is fairly simple. To enroll, make sure you shop for health plans during the Open Enrollment Period. If your employer offers health insurance benefits, you may also be eligible to enroll through the company. Some people may also qualify for a Special Enrollment Period.

The 2020 Open Enrollment Period begins on November 1, 2019, and ends on December 15, 2019. Some states may have extended enrollment periods. A Special Enrollment Period is available to individuals and families for 60 days after specific life events such as getting married, moving or having a child.

For government-run plans, you’ll need to create an account on Healthcare.gov by verifying your identity online. In contrast, private health insurance exchanges require you to complete a short, online enrollment form, then finish the process with a licensed agent making a quick phone call. The agent verifies your identity, checks if you qualify for a premium subsidy and answers any questions you might have about health insurance plans.

Regardless of the exchange, once you’ve submitted the application and formally enrolled, you’ll get your membership material, including your first bill, directly from the insurance vendor, and your membership ID. The coverage will become active on the mentioned effective date as soon as you clear the bill.

The choice is yours

Health insurance is mandatory for U.S. residents to cover the high cost of quality healthcare. Low-income earners are eligible for Medicaid. Others might either buy health insurance or expose themselves to medical bankruptcy. It’s just like insurance for your car, apartment or home. It’s supposed to safeguard your hard-earned income from the staggering costs of medical emergencies, chronic diseases or major accidents.

Of course, the right health insurance plan will depend on your own specific preferences. By enrolling in an exchange, you’ll be able to analyze the different health plans and what coverage options they provide before choosing one. If you find it confusing, know that most exchanges offer phone support to help you sort out the details.

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